From Nasdaq: 2024-11-10 05:30:00

Apple’s recent fiscal fourth-quarter results fell short of expectations, with mediocre progress in sales and operating income. While revenue and earnings per share beat Wall Street estimates, net progress was modest. The company’s consumer-oriented AI platform, Apple Intelligence, needs to be a success to drive growth.

iPhone demand is tepid, affecting overall revenue growth for Apple. Despite a revenue increase to $94.9 billion, profits dipped due to a one-time tax payment. iPhone revenue only grew 5.5% last quarter, highlighting the importance of Apple Intelligence for future growth.

Apple’s stagnant iPhone business is a concern, as it contributes significantly to the company’s revenue. CEO Tim Cook anticipates low to mid-single-digit growth in the upcoming quarter, with iPhone demand remaining lackluster. Apple Intelligence is seen as a potential catalyst for growth, but its impact remains limited so far.

Generative AI-capable smartphones, like the iPhone 15 and iPhone 16, are projected to dominate the market. However, concerns over the technology’s practical usefulness are emerging, with predictions of a slowdown in its impact. Other smartphone manufacturers are also incorporating AI technology to compete in the market.

Goldman Sachs and Gartner express doubts about the practicality and cost-effectiveness of generative AI technology, raising questions about its ability to drive iPhone demand. While Apple remains a profitable company, without significant iPhone growth, it may continue to report mediocre results. Artificial intelligence remains a potential growth driver, but uncertainties remain.

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Read more at Nasdaq: It’s Official: Apple Needs AI to Be a Winner